Stock-market turmoil. Skyrocketing deficits. Fears for the future. OK, economists of the world, what one book would you recommend for understanding -- or coping with -- today's turbulent economy?
Murray Weidenbaum, former chairman, President Reagan's Council of Economic Advisers: "Read Alan S. Blinder's Hard Heads, Soft Hearts. Maybe it tries to teach a little too much economics -- ant it's certainly too liberal for my tastes -- but it's a good introduction to today's economic dilemmas. What Blinder is saying is that we've got some tough decisions ahead, and we should not make them at the expense of the poor. He'd settle for more inflation than we have now, for example, in order to reduce unemployment. I don't agree: once you start on that road you get into the mess Jimmy Carter bequeathed the Reagan Administration in the first place. But Blinder makes an interesting case, and he's a good economist."
Alan S. Blinder, professor of economics, Princeton University: "I'd vote for David A. Stockman's book, The Triumph of Politics. It's a general lesson on how politics and economics interact, which is especially helpful when you're trying to understand why nothing gets done about the deficit. There are plenty of reasonable ideas for solving our economic problems -- but when politics runs wild, sensible thinking gets shunted aside. Indeed, some of the scenarios described in the book are still being played out today, albeit on a much smaller scale than in 1981. We still see the same political posturing, the same arguing over statistics (and the tricky accounting methods used to compile them), the same refusal to come to grips with reality."
A. Gary Shilling, president, A. Gary Shilling & Co. "Look for American Business: A Two-Minute Warning, by C. Jackson Grayson Jr. and Carla O'Dell. It's a book that discusses the need to improve productivity in this country and offers some realistic suggestions for doing so. We need this kind of serious analysis. Competitive devaluations of the dollar and other currencies aren't the answer to international competition; all they do is make us poorer. Instead, as the authors note, we've got to do everything we can to improve productivity -- change attitudes, get employees involved, institute new education and training programs. Unless we're going to work for $2 an hour, the only way we can compete is by being more productive. This book tells us how."
Stephen Quick, chief economist, Joint Economic Committee, U.S. Congress: "I'll recommend Alfred L. Malabre Jr.'s Beyond Our Means. Malabre's view is that our buildup of debt -- not just government but corporate, household, and international debt as well -- carries real dangers for economic growth in the future. Malbre, economics editor for The Wall Street Journal, worried that foreigners, for example, will force an economic crisis on us by refusing to finance our trade deficits anymore. There are problems with the book, however. Malabre doesn't address the complications and uncertainties of the statistics on which he relies, and he's too apocalyptic in his outlook; the American economy may have more resilience and ability to avoid a crisis than he gives it credit for. Still, he's right that the economic challenge of the next decade or so will revolve around how we learn to live within our means rather than beyond them. It will involve painful changes in both habits and policies, but it is a task we cannot postpone any longer."
* Hard Heads, Soft Hearts, by Alan S. Blinder (HC, Addison-Wesley, 1987, $17.95)
* The Triumph of Politics, by David A. Stockman (PB, Avon, 1987, $4.95, HC, Harper & Row, 1986, $21.45)
* American Business: A Two-Minute Warning, by C. Jackson Grayson Jr. and Carla O'Dell (HC, Free Press, 1988, $22.95)
* Beyond our Means, by Alfred L. Malabre Jr. (HC, Random House, 1987, $17.95)